2007 Readers' Choice Awards

by Isaac M. O'Bannon On Jan 1, 2008

With the changing of calendars from 2007 to 2008, it’s also time to announce
the results of the 2007 Readers’ Choice Awards, an annual insight into
the minds of tax and accounting professionals. The Awards, featuring more than
25 categories of professional applications, hardware, services and other technologies,
give those in these professions a way to express appreciation for the systems
that help them in their practice. As with last year’s results, some of
the findings were somewhat expected, while others were surprising.

The
CPA Technology Advisor’s Readers’ Choice Awards are not a scientific
study, but rather a popularity contest of sorts, allowing readers to vote online
in the various categories. All of the companies whose products were included
in the awards voting were encouraged to drum up support for their products,
and the voting in some categories shows a strong base of user support for particular
brands and products.

An example of this is Drake Software, whose tax compliance system won the
professional tax preparation category for the second year in a row. Drake’s
actual market share is about 10 percent, but its customer base remains one of
the most loyal and satisfied of any tech product. Not surprisingly, Intuit’s
ProSeries and Lacerte brands, which together command a large share of the market,
took the other top spots in the survey. Another product that received a higher
than expected voter turnout was PC Software Accounting’s write-up program,
which took third place behind big names Intuit and Thomson Tax & Accounting.

In the payroll category, which has one of the most crowded markets with more
than two dozen notable program and service providers, the automated online PayCycle
system came out ahead, with QuickBooks and Advanced Micro Solutions’ (AMS)
offerings close behind. In another large category, Drake Software’s loyal
customer base also helped the company win the top slot for Document Management
systems, while systems from Intuit Lacerte, Thomson Tax & Accounting, e-FileCabinet
and Acct1st Technology Group wrapped up the category.

A new area this year is automated “scan and fill” systems (see
Executive Editor Greg LaFollette’s Final
Thoughts column), which streamline tax preparation by allowing professionals
to simply scan a document, while the system automatically determines what kind
of document it is (W-2, K-1, 1099, etc.). It then pulls the financial data from
the form and allows it to be quickly transferred into a client’s return.
A similar product category, “scan and organize” systems are geared
toward digital information storage, creating searchable and indexable versions
of documents that are scanned in.

The winner in this new category was Intuit’s Source Doc Auto-Entry,
which received about half of all votes. While this indicates user satisfaction
with the product, curiously enough, Intuit has decided to pull the product for
this tax season, stating that it needs to redesign the product to make it more
amenable to user needs. What?

As with last year, Intuit’s line of QuickBooks products continues to
dominate the small business market, with professional accountants embracing
the system for client-side business management. This is likely related to the
integration capabilities, since the professional version of the program took
the write-up category. Systems from Sage Software’s MAS line and Microsoft
Dynamics were preferred for larger clients.

In addition to these tax and accounting oriented technologies, the Readers’
Choice Awards also include categories for general business devices and hardware
like computers, cell phones, and printers and scanners. Delivery food (mostly
pizza) and coffee still reign as the top choices for sustenance during those
late nights during tax season.

The CPA Technology Advisor’s 2007 Readers’ Choice Awards
are your voice to vendors and your peers on the technology products and services
that make you more efficient, productive and profitable. And this collective
voice of the tax and accounting profession helps drive future innovation.

Thank you to the thousands of professionals who voted in the 2007 Readers’
Choice Awards. We look forward to hearing from you again next year.

IN-PRACTICE TECHNOLOGIES

Federal/State
Income Tax Compliance

Insight:
Over the past few years, many firms have been able to adopt new technologies
to increase the number of clients they can service with the same staff
and speed up processing. While “scan & organize” products
are being quickly embraced by firms, the new “scan & fill”
systems are still somewhat on the horizon, but show great promise for
productivity. Automatic population of tax returns, coupled with other
timesaving features, is greatly increasing productivity for practices.
As with last year, Drake Software’s loyal base of tax professionals
showed up in force, helping the company take first place with more than
30 percent of respondents. The tax software vendor actually has about
10 percent of the market, while Intuit’s Lacerte and ProSeries brands,
coming in second and third in our 2007 Readers’ Choice voting, together
account for close to 35 percent of the market. Orrtax has made a rebound
in the past few years and made a good showing in this year’s voting.
View
Chart

Specialty Systems
& Tax Prep Tools

Insight:
While these systems can’t really be compared head-to-head since
they offer very different tools and features for different purposes, it
is interesting to see the number of professionals who utilize a third-party
system to fill in niches where their tax program doesn’t meet their
needs. In all, more than 6 percent of voters use a specialty tool. View
Chart

Tax Planning Systems

Insight:
The top three products here are neck and neck (and neck) with our voters,
of which 30 percent cited use of a dedicated tax planning program. Tax
planning services are becoming increasingly popular with professionals,
especially since such services allow them to help clients and generate
additional revenue using their existing tax specialties. While most tax
prep systems can be used for rough estimating, a good planning system
provides many more scenario functions, and they take into account planned
phase-outs and other anticipated changes in tax treatments. View
Chart

Tax Research Systems

Insight:
About 50 percent of our voters reported that they use a tax research system,
with virtually all of them choosing online options from the major tax
information providers like Thomson, CCH, BNA and PPC. Thomson RIA’s
Checkpoint took the top spot this year, while Intuit’s TaxAlmanac.org
received about 9 percent of votes. The wiki-based tax research website
is free, and therefore is also used as an additional resource for users
of the other systems. TaxAlmanac also received a 2006 Tax & Accounting
Technology Innovation Award. View
Chart

Sales & Use Tax Compliance

Insight:
This is a niche market that the major accounting vendors haven’t
successfully tackled at the small business level. As the Internet continues
to let small businesses sell to people everywhere, the job of keeping
up with their sales tax obligations is mounting. And because most of the
truly comprehensive (all 8,000+ U.S.) taxing jurisdictions are cost-prohibitive
to many entities, smaller vendors like eFileSalesTax.com and CFS still
own the larger share of the SMB market. But they better keep on their
toes: Avalara and CCH are developing more flexible pricing models and
scalable systems. View Chart

Write-Up

Insight:
Accountants have officially left the “welcome” mat out for
Intuit. More than half of our voters reported using a write-up system,
and the vast majority of those professionals cite the QuickBooks Premier
Accountants Edition as their program of choice. This is an increase over
last year, which shows the continued saturation of QuickBooks into both
the professional and small business arenas. The users of PC Software Accounting’s
system were successful in voicing their support for the program, edging
up to second place overall, although the system has a lower actual market
share. The company apparently keeps users satisfied. View
Chart

Engagement Management

Insight:
As noted in the Trial Balance entry on page 31, many trial balance functions
have found their way into other programs, frequently engagement management
systems, which provide more comprehensive control over workpaper management
and workflow functions, while also offering financial statement preparation
and dynamic data that can automatically integrate with other programs.
Of the three major players in this market, CCH still commands a notable
lead among our readers while the Thomson product continues to grow. View Chart

Estate Planning

Insight:
With less than 10 percent of tax and accounting professionals voting for
such systems, Estate Planning is a specialized service, but shows considerable
growth potential because of the Baby Boomer population. Estate organization
and generational wealth transfer is also often served by the legal profession. View Chart

Insight:
While some professionals don’t even want the “P” word mentioned in their
presence, the service has been making a major comeback in a lot of practices
around the country. With online systems helping to automate many processes,
accountants are often taking a management-based role, while providing
varying levels of direct work in the payroll area. For example, PayCycle,
which overtook Intuit in voting this year, lets accountants resell the
payroll service, and clients can do all, some or none of the data entry
depending upon the firm’s service model. View Chart

Trial Balance

Insight:
As the trial balance function continues to be absorbed by other programs,
only about 8 percent of voters reported the use of a dedicated Trial Balance
system. With more than 90 percent of the voters selecting either Thomson
Tax & Accounting’s Trial Balance CS or CCH’s ProSystem
fx Trial Balance, these two companies pretty much own the market. View Chart

1099/W-2 Compliance

Insight:
W-2 reporting is obviously a payroll function, while 1099s are an AP function.
And while all payroll and AP systems can easily output checks, the reporting
elements are often lacking, especially when these functions are handled
after-the-fact by an accountant. Since these two processes are in the
gap between AP and payroll, smaller vendors like AMS and CFS continue
to draw large user bases to their specialized programs. View Chart

Practice Management/Time & Billing Systems

Insight:
Only slightly more than 20 percent of practitioners reported using a time
and billing or practice management system. Unfortunately, this means the
majority of tax and accounting professionals are still tracking time and
expenses with Post-Its, spreadsheets or e-mails. The top vote earner continues
to be TimeSlips, but all of these systems provide good analysis and reporting
to help practices better control their most precious asset: time. View Chart

Analytical/Forecasting/Budgeting Tools

Insight:
About 13 percent of voters cite the use of specialty programs or online
tools for providing clients with deep financial analysis, forecasting
and budgeting services. In addition to helping clients better understand
their own businesses, comprehensive financial statements are also required
by many lenders and other parties. The ProfitCents system was early in
this market and seems to have established a real following in the accounting
space. View Chart

“Scan & Organize”/“Scan & Fill”
Systems

Insight:
Even though it is a new category this year, nearly 30 percent of voters
claimed that they use a “Scan & Organize”/“Scan
& Fill” System. These programs have emerged as one of the most
promising new technologies for tax practices, with some helping to automate
virtually all document-related data entry, while others provide automated
searchable filing and retrieval options. The first to market with such
systems, Intuit, SurePrep and CCH, control this area. Despite its popularity
with our readers, however, Intuit is retooling its system and does not
expect it to be offered again until TY 2008. For more information on this
genre of products, see Greg LaFollette’s
column in this issue. View Chart

Business Valuation

Insight:
Although another niche service offering, Business Valuation services are
especially in demand during transitions or if a firm works closely with
attorneys during family litigation. View
Chart

Website Builders for Accounting Firms

Insight:
Those Drake users sure do like the vendor, which gives free, but basic,
websites to firms using its inclusive tax suite. Among the other top contenders,
AccountantsWorld continues to expand its collection of online resources
for practitioners, providing complete virtual offices. View Chart

Fixed Asset Management

Insight:
The market for fixed asset management systems appears to be one of the
last categories where “best of breed” seems to matter most
to professionals, in that the percentages do not directly track the use
of underlying tax compliance products. View Chart

Document Management

Insight:
More than 40 percent of all voters use a document management system, and
an overwhelming response by Drake users propelled that vendor’s
system to the top of this category. Drake’s Document management
system is included in the vendor’s tax suite. View Chart

Insight: What we say that is pretty
obvious from the first few product areas: Intuit is the undisputed leader
in small and mid-sized business management programs. Since the company
started creating specialized versions of its QuickBooks system for several
different industry types, it has become further ingrained into the psyches
of entrepreneurs everywhere.

Considering our numbers come from tax and accounting professionals, the
results are even more impressive. Once upon a time, the professional accounting
community was grudgingly accepting of QuickBooks — they had to accept
its use because so many of their clients were using it regardless of the
professional’s advice. But now the community embraces the system,
whether it’s to consolidate all or most clients onto the same system
or because the program is generally easy to use and gets clients to maintain
their books more effectively because of its intuitiveness.

Of the product categories in the client-side accounting section, only
two are not dominated by a QuickBooks version: Property Management (for
which another Intuit product took the top slot), and Accounting for Larger
Entities (for which Intuit doesn’t really provide an option). In
this latter category, Sage Software’s MAS 500 and Accpac 500 lines
received the most combined votes, while Microsoft’s Dynamics brands,
which include GP, AX and NAV, took second (these are the former Great
Plains, Axapta and Navision lines).View
Chart

Construction/Contractor
Accounting

Accounting for Larger
Entities

Mid-Range Accounting

Not-for-Profit Accounting

Retail Accounting/POS

Property Management

GENERAL BUSINESS TECHNOLOGIESIn keeping with last year, we included general business product categories
in our Readers’ Choice Awards, as well as the preceding tax and accountant-centric
categories. Since many of these general business products overlap or a professional
might have more than one, multiple choices were allowed on these questions

Computers (Laptops & Desktops)

Insight:
With about 50 percent of readers voting for Dell, the primarily online
retailer of everything biz-tech dominates the PC market, at least for
accounting professionals. Other notables continue to be HP and Toshiba.
View Chart

Printers/Scanners

Insight:
Once again, voters were allowed to select more than one vendor in this
category, but an overwhelming majority chose HP as their brand of choice,
even if they also chose another. I guess the once-little company founded
in a Palo Alto garage is still doing okay. View
Chart

Smart Phones

Insight:
While most professionals have yet to get on the “smart phone”
bandwagon, those readers who do utilize a data and Internet-enabled mobile
communication device seem sold on Palm’s Treo line and, of course,
the ubiquitous BlackBerry. The iPhone is making an impressive charge for
a product that wasn’t even on the market this time last year. View
Chart

Office Supply Store

Insight:
The voter’s top choices in this category were, not surprisingly,
the nation’s top business supply chains. Online and catalog supplier
Quill took a noteworthy number of votes, while Big Box member stores Sam’s
Club and Costco round out the top six. View
Chart

PERSONAL TAX SEASON FUEL

Favorite Late Night Tax Season Survival Food

Insight:
The Domino’s commercial isn’t about to change to “[Ding
Dong] … Get the door, it’s the veggie guy,” but trends
in healthier diets are working their way into the lives of tax and accounting
professionals, even during the darkest days and nights of April. Of course,
if we were to combine all kinds of take-out and delivery, the contest
wouldn’t be close. View
Chart

Caffeine Preference

Insight:
And the profession still runs on good old caffeine, with nearly half of
all voters selecting traditional Joe as their preference for the stay-awake
stimulant, while combined votes for other coffee-based drinks accounted
for another 13 percent. Sodas are a strong second, with hot and iced tea
drinkers on their heels. More than 10 percent of our voters refrain from
caffeine beverages. View
Chart

Thank you to the thousands of tax and
accounting professionals who voted in the 2007 Readers’ Choice Awards.
Your participation helps us better understand the constantly evolving nature
of the professional practice, and it gives you a chance to make your voices
heard. Voting for next year’s Readers’ Choice Awards will start
in late fall. If you know of products or questions that should be included next
year, please let us know.